Taiwan cabinet approves US arms package amid China threatTAIPEI (AFP) Mar 16, 2005Taiwan's cabinet approved Wednesday an arms deal with the United States worth almost 15.5 billion dollars just 48 hours after rival China gave its military the legal basis to attack the island should it declare formal independence.

The new package has been reduced by a quarter to 480 billion Taiwan dollars (15.48 billion US) from an earlier proposal in December as the island seeks to quickly finalise the deal seen as vital in boosting its defense capabilities.

China's enactment Monday of the anti-secession law gave fresh impetus to overcoming opposition grievances over the price of the package, which must be approved by parliament before it goes ahead.

"It now comes to the time that it has to be dealt with ... as national security is coming under greater threat," said government spokesman Cho Jung-tai after the cabinet approved the deal.

However, Taiwan's parliament is dominated by the opposition and Lin Yu-fang from the opposition People First Party said Wednesday the package was still "unacceptable".

"The original package was inflated, and therefore even though the price of the new arms package has been cut to 480 billion dollars, the amount is still not acceptable," said Lin.

"If this bill clears the parliament, Taiwan would pay (for) the most expensive submarines in the world," he said.

The arms bill will be submitted to parliament for approval soon.

The special arms budget calls for the purchase of six US-made Pac-3 anti-missile systems, eight conventional submarines and a fleet of submarine-hunting P-3C aircraft from the United States over 15 years beginning this year.

Much of the savings in the new package come from the military's decision to purchase the submarines outright rather than build part of them in Taiwan with an expensive technology transfer.

The United States remains the leading arms supplier to Taiwan despite its switching of diplomatic recognition to Beijing in 1979.

Under the Taiwan Relations Act of 1979, the United States is obliged to provide arms "of a defensive nature" to the island.

China's rubber-stamp parliament also approved Monday a 12.6 percent increase in military spending this year to 244.65 billion yuan (29.5 billion dollars), sparking concern from Washington.

"Certainly, the (Chinese) military spending is concerning because it is taking place at a time when the cross-Strait issue is not still resolved," US Secretary of State Condoleezza Rice told reporters on board a plane as she began a six-nation tour that will include a visit to Beijing.

Some critics say Taiwan cannot afford the spending while others say the weaponry will not be delivered in time to fend off an attack from China in coming years.

Some fear the massive purchase could fuel an arms race with Beijing, which regards Taiwan part of its territory awaiting reunification, by force if necessary.